Two law firms that represented customers caught up in the
collapse of MF Global Holdings Ltd. (MFGLQ) have linked up to
prepare a class-action lawsuit on behalf of clients of Peregrine
Financial Group Inc.
Berger & Montague PC and Collett Legal are discussing such a
suit with former customers of Peregrine, which collapsed into
bankruptcy this week after its chief executive attempted suicide
and regulators alleged hundreds of millions of dollars in client
money had gone missing.
"We're getting this process going," said Greg Collett, principal
at Collett Legal.
Lawyers for the two firms are still evaluating where the case
should be filed and which Peregrine officials it should be filed
against, though Peregrine CEO Russell Wasendorf Sr. is likely to be
named, Mr. Collett said.
A filing could come as early as next week, he said.
Berger & Montague in May was named co-lead counsel for civil
lawsuits brought against MF Global, following the January filing of
a class-action lawsuit against former MF Global CEO Jon Corzine and
other officials of that firm. The action seeks to reclaim missing
customer money, with about $1.6 billion in client assets yet to be
returned more than nine months following MF Global's demise.
Collett had represented about 150 MF Global customers in class
action against MF Global, and continues to represent customers of
that firm in other litigation against it.
Executives whose companies fall into bankruptcy tend to be
targets of such class-action lawsuits, as bankruptcy proceedings
typically prevent such firms from being sued, Mr. Collett said. The
class-action lawsuits can target individuals, their assets and
entities related to the collapsed company.
The effort has the backing of the Commodity Customer Coalition,
an ad hoc group of asset-management firms and commodity traders
formed following the downfall of MF Global in October 2011 to
assert the views of clients in bankruptcy court and keep former
customers up to date on legal proceedings.
The group, which includes some former clients of Peregrine, has
stepped into a similar role after that firm ran aground earlier
this week.
Mr. Wasendorf was arrested Friday on charges of lying to federal
market regulators.
Write to Jacob Bunge at jacob.bunge@dowjones.com; Twitter:
@jacobbunge